Comment Text:
These comments are submitted by Ed Kaim, founder of Quantcha, in his individual capacity as a practitioner who has built professional research and trading infrastructure for both options and prediction markets. The full comment letter is attached.
The thesis is that the CFTC's existing DCM and futures framework is the right regulatory home for the category of event contracts that serve genuine financial market functions, and that the conceptual tools needed to address harder design questions on margin structure, manipulation detection, and surveillance are available in the options market. Specific recommendations include: (1) a structural economic utility test (hedging utility, price discovery utility, or genuine risk transfer) as the basis for distinguishing event contracts that warrant federal accommodation from activity that does not; (2) affirming intra-series netting on direction market groups, already approved as established practice in Kalshi Klear's DCO rulebook, as a baseline standard for cumulative event contract clearing; (3) preserving full collateralization while developing a forward-looking cross-exchange and ETF collateral pathway that allows traditional brokerage and asset management infrastructure to participate; and (4) baseline KYC requirements with cross-market data sharing between the CFTC and the SEC, validated by the recent enforcement record in CFTC v. Van Dyke.
The full letter addresses Questions 1, 2, 8-12, 15, 19-20, 29-31, and 2(b)-(e). Questions outside that scope are respectfully directed to commenters with more direct operational expertise in clearing procedures, swap classification, and CEA legal edge cases.
